Open source: The stealth stimulus package

If I asked you to account for your energy consumption, you might list your laundry equipment on the spreadsheet. We’d see how much you spend using your dryer each month — quite a large amount. Worried by the cost, you might then opt for a clothesline in your yard. Naturally, your costs have gone down. But has your energy usage? You’re actually consuming as much energy as before, but you may decide to omit it from your spreadsheet because you’re no longer paying for it.

This tendency to account only for the resources we pay for and to ignore the value of the resources we don’t is called “the clothesline paradox” (first coined by Peter van Dressler). It was also the subject of O’Reilly Media CEO Tim O’Reilly’s well-received keynote at the recent Open Source Convention (OSCON) in Portland, Ore.

[ Learn how to install Apache on Linux in InfoWorld Test Center’s step-by-step guide. | Track the latest trends in open source with InfoWorld’s Technology: Open Source newsletter. ]

O’Reilly highlighted the value of another public resource not included in balance sheet: America’s economy in the 21st century has a profound dependence on open source software. However, in most corporate balance sheets, it’s either passingly mentioned or, more often, forgotten entirely. Given it’s not a cost, that’s not surprising. But it also means we have no idea how valuable open source actually is.

Small business and open source One step toward filling that knowledge gap is a report that O’Reilly Media released at OSCON, “Economic Impact of Open Source on Small Business: A Case Study.” Based on data from ISP BlueHost, it considers the anonymized data from over 2 million of the company’s customers, backed up by a survey of 4,000 of the same base. Most of BlueHost’s customers are small or medium-size businesses.

BlueHost uses open source software to deliver the majority of services to these customers; while none of them would regard their ISP as open source (though the majority is familiar with the term), the benefit they derive is massively dependent on open source software. Without it, the economical domain hosting of the kind BlueHost and its ilk offer would likely be impossible.

In addition, the overwhelming majority of the applications its customers are running on their sites are open source, with content management the leading category, represented by WordPress, Joomla, and Drupal. Those applications in turn are powered by other open source packages and are served up on the Web by open source.

It’s no stretch to assert that all the benefit BlueHost and its customers gain from their hosting activities is derived from open source software. How much value has that introduced into the economy? Think of it this way: BlueHost’s customer base has an estimated aggregate revenue of about $124 billon. Given BlueHost has about 10 percent of the hosting market, that implies there’s around $1 trillion revenue in the economy dependent on open source software in the Web segment alone.

Defending the source of wealth No one much cares that energy is used by clothes dried in the sun. So why should we care about all the revenues stimulated in the economy by open source?

That’s precisely the problem we face: The value is invisible. Legislators don’t protect this important economic stimulator because it doesn’t show up their fiscal measures. Nobody is reporting the value of, or the value from, the open source software they use. For some, it’s even the source of their otherwise inexplicable ability to turn computers into wealth via Web services — yet it still goes unreported.

As a consequence, legislators fail to account for the health of open source. While there may be tax breaks for a wide range of topics that interest corporate lobbyists, there are no tax breaks for supporting open source. Software patents may present a higher risk to open source than to the rest of the software industry, yet legislators are slow to reform them. The list goes on and on. Worse, new legislation has no lobbyists intervening in the interests of open source, so there’s a severe risk of bad legislation harming this crucial source of American wealth and opportunity — as SOPA nearly did recently.

It’s time to change this. Open source has moved from being disruptive to the default, and legislators need to recognize that. Making this happen will be a slow process, but the tools are already at our disposal. We have the Electronic Frontier Foundation, whose support for Declaration of Internet Freedom characterizes its general defence of the rights essential for open source to exist. I suggest you support the group.

We also have the Open Source Initiative (OSI), of which I am now honored to be president, and at OSCON, we launched Individual Membership for the first time. It’s my hope that OSI can also become a powerful voice for open source, just as it’s been an important steward of the definition of open source over the last 14 years. You’d expect me to say this, but I hope you’ll join OSI too.

This article, “Open source: The stealth stimulus package,” was originally published at InfoWorld.com. Read more of the Open Sources blog and follow the latest developments in open source at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.